Blanket Mine 2015 gold output exceeds target

GWANDA-based gold producer, Blanket Mine’s 2015 output exceeded initial target estimates by two percent, after it rose by 2,5 percent to 42,804 ounces for the year ended December 31, 2015 from prior year. The mine’s overall 2015 performance was positively impacted by higher output in the fourth quarter, which rose to 11,515 ounces from 10,417 ounces in the prior comparable quarter.

But the growth in output which was driven by higher tonnes milled was offset by a lower grade, said parent company Caledonia Mining Corporation. Blanket Mine is fully indigenised and 49 percent owned by the Toronto Stock Exchange-listed Caledonia. On-mine costs at $701 per ounce increased in the year due to the lower average grade which outweighed the overall reduction in cost per tonne milled All-in sustaining costs jumped 7,1 percent to $1,038 per ounce during the period under review from $969 in 2014, which management attributed to “increased sustaining capital investment.”

According to Caledonia, investment at Blanket Mine increased from $6 million in 2014 to around $17 million last year as a result of the implementation of the Revised Investment Plan. The Revised Investment Plan which was announced in November 2014 is aimed at increasing Blanket’s output to approximately 80,000 ounces of gold by 2021.

It also seeks to enhance the mine’s operational efficiency and improve its ability for further deep level exploration and development, thereby extending its life. Average realised gold price during the period under review declined to $1,139 per ounce from $1,245 in 2014, due to the lower gold prices that prevailed through the course of last year. The weaker gold prices knocked the producer’ gross profit 29 percent lower to $13.1 million from $18.5 million last year.

Net profit, however, improved by 6.8 percent to $4.7 million attributable to a foreign exchange gain arising from the devaluation of the South Africa rand against the US dollar and lower taxation, said Caledonia. Caledonia said payments to the community and Zimbabwe government amounted to $7.3 million last year, down from $12.3 million in 2014.

“Payments to the community and the government in 2015 were lower than in previous years due to the lower income tax and royalty payments,” said management. Meanwhile, Caledonia announced today that it has successfully completed the re-domicile of the company into Jersey, Channel Islands.

“In February 2016 Caledonia’s shareholders approved, by an overwhelming majority, the proposal that Caledonia should migrate its tax and legal domicile from Canada to Jersey, Channel Islands. This migration will be effected today and reduce the tax burden on Caledonia and its shareholders, and reduce the costs of tax compliance,” said Caledonia chief executive Steve Curtis. Going forward, the CEO expects the mine to start reaping the benefits of ongoing restructuring and investment.

“I expect that 2016 will be a transformational year for Caledonia as the benefits of restructuring and investment become apparent and I look forward to updating the market accordingly,” he said. — BH24.